According to the Canadian Real Estate Association (CREA), national home sales fell 0.9 per cent from May to June, causing sales activity to dip 2.6 per cent below the record set in April 2016.
About half of all markets experienced falling sales activity in June, with declines in Greater Vancouver, the Fraser Valley and Greater Toronto overshadowing gains in other less active housing markets.
“While national sales activity remains strong, there are still significant differences in housing market trends across Canada,” said Cliff Iverson, CREA president, in a press release. “While home sales activity and price growth are running strong in B.C. and Ontario, they remain subdued in other markets where homebuyers are cautious and uncertain about the outlook for their local economy.”
“June sales extended trends observed the previous month,” added Gregory Klump, CREA chief economist. “As was the case in May, the monthly decline in national sales activity was led by the Lower Mainland of British Columbia and markets in or around the GTA. In keeping with the law of supply and demand, exceptionally low inventory combined with high demand continues to translate into strong price growth in these housing markets, where year-over-year price gains have been running in double-digit territory since late last year.”
Actual, non-seasonally adjusted sales activity increased 5.2 per cent year-over-year in June, but these increases have been slowing since February of this year.
The number of newly listed homes increased 2.2 per cent month-over-month in June 2016. The Greater Toronto, Oakville-Milton, Montreal, Quebec City and Fraser Valley markets all saw new supply increase. The return of activity in Fort McMurray after the city’s evacuation in May contributed to the national increase in new listings.
The combination of falling sales and increasing listings led to a sales-to-new listings ratio of 63.3 per cent in June 2016, a two per cent decline compared to May, indicating the still-active sellers’ market. Sellers’ markets were detected in about half of all local housing markets in June, most of which are located in British Columbia, the GTA and across Southwestern Ontario.
At the end of June 2016, there were 4.6 months of inventory on a national basis, results that are unchanged from May and the lowest level in over six years, reflecting increasingly tighter housing markets in B.C. and Ontario.
The MLS Home Price Index increased 13.6 per cent year-over-year to $564,700 this June, its largest jump since December 2006. For the fifth consecutive month, prices increased across all benchmark property types.
Two-storey single family homes saw the largest year-over-year gain at 15.5 per cent, while single-storey home prices increased 14 per cent year-over-year. Townhouse/row units had price increases of 13.6 per cent, while apartment units had the slowest year-over-year price gain at 9.8 per cent.
The Fraser Valley and Greater Vancouver regions posted the largest year-over-year price gains, at 35.5 per cent and 32.1 per cent, respectively. Although home prices were up in 9 of 11 regions, Calgary and Saskatoon both saw prices fall compared to last June.
The actual (not seasonally adjusted) national average price for homes sold in June 2016 was $503,301, an increase of 11.2 per cent year-over-year. When excluding the Greater Toronto and Greater Vancouver areas, which continue to be two of Canada’s tightest and most expensive housing markets, the average price of a home falls to $374,760, which is an 8.4 per cent increase year-over-year.